Abstract--This paper presents the study to investigate the possibility of the stand-alone micro hydro for low-cost electricity production which can satisfy the energy load requirements of a typical remote and isolated rural area. In this framework, the feasibility study in term of the technical and economical performances of the micro hydro system are determined according to the rural electrification concept. The proposed axial flux permanent magnet (AFPM) generator will be designed for micro hydro under sustainable development to optimize between cost and efficiency by using the local materials and basic engineering knowledge. First of all, the simple simulation of micro hydro model for lighting system is developed by considering the optimal size of AFPM generator. The simulation results show that the optimal micro hydro power plant with 70 W can supply the 9 W compact fluorescent up to 20 set for 8 hours by using pressure of water with 6 meters and 0.141 m3/min of flow rate. Lastly, a proposed micro hydro power plant can supply lighting system for rural electrification up to 525.6 kWh/year or 1,839.60 Baht/year and reduce 0.33 ton/year of C02 emission.